Introduction
The sanctions imposed on Russia in 2022 disrupted the supply of imported components across many industries, and bus manufacturing was among those most affected [1, p. 94-102]. Since bus production is closely tied to the demand of state and municipal organisations [14, p. 297-302], the stability of this industry largely depends on the effectiveness of import substitution policy.
Import substitution in public procurement is regulated through the national regime, defined as a set of barriers and prohibitions that prevent foreign goods from participating in public tenders [10, p. 328-341]. Buses are subject to the strictest mechanism – the prohibition – which bars customers from purchasing foreign-made buses unless no domestic equivalent exists or the purchase falls below a statutory threshold. To confirm domestic origin, a bus model must be listed in the register of Russian industrial products or the Eurasian register of industrial goods and accumulate a minimum number of localisation points for operations performed in Russia or another EAEU member state; these thresholds are scheduled to rise from 2,900 points in 2021 to 5,600 by 2026 (Government of the Russian Federation Resolution No. 719; Eurasian Economic Commission Council Decision No. 105).
Studies on the national regime report mixed results: some find it stimulates domestic industry, innovation, tax revenue and exports while reducing capital outflow [8, p. 1-12; 10, p. 328-341; 16, p. 344-359]; others argue it discourages competitiveness among domestic suppliers in the long run [6, p. 41-73] and provokes reciprocal restrictions that distort trade [2, p. 7-19; 5, p. 249-265; 12, p. 355-400]; a third view holds that effectiveness depends on regional and product-specific conditions [1, p. 94-102; 8, p. 1-12; 9, p. 2165-2174; 11, p. 209-216; 15, p. 165-181], the approach followed here. Despite this literature [1, p. 94-102; 3, p. 1-43; 9, p. 2165-2174; 13, p. 509-525], the consequences of the national regime for bus procurement specifically remain unstudied. This research analyses its implementation in Russian bus procurement between 2016 and 2023, testing three hypotheses: (H1) the national regime stimulates the localisation of bus production in Russia; (H2) the prohibition mechanism increases the share of domestically produced buses purchased; (H3) the national regime reduces supplier competition and cost savings in concluded contracts.
Objects and Methods of the Study
The consequences of the national regime were examined using secondary data analysis, defined as the analysis of data collected by others [4, p. 2-39; 7, p. 619-626]. The empirical part draws on government contracts for the purchase of buses published in the Procurement section of the Unified Information System (EIS); the State Information System of Industry (GISP), which maintains the register of Russian industrial products and import permits, served as an auxiliary source.
Data collection was limited to 2016-2023 and included only bus-purchase contracts. The final sample comprised 12,114 contracts worth 257.1 billion roubles, 97% executed. Contracts were systematised in Excel and sorted by year, quarter, procurement method, supplier category, country of origin, and cost savings. For each year, the following indicators were calculated: contracts and buses purchased; procurement-method shares; the share of contracts with small and medium-sized enterprises (SMEs); the share of non-competitive procedures (zero or one bid); the average number of bids; cost savings relative to overall public procurement; the total value and average price of purchased buses; country of origin; and the share of contracts with an identified national regime violation.
Results and Discussion
Between 2016 and 2023, 12,114 contracts were concluded for buses, 97% executed. Contracts fell markedly after a 2018 peak, while buses purchased fluctuated between roughly 5,600 and 9,200 units a year (tab. 1). The 2020 decline coincided with the COVID-19 pandemic; the 2022 decline followed the sanctions-driven component shortage. Almost all contracts concerned new vehicles, apart from 13 for used buses and 25 leasing contracts, both also subject to the prohibition mechanism. Electronic auction remained dominant (over 78% of contracts), though single-supplier procurement rose to 21.5% in 2020, likely reflecting pandemic-related supply risk. The share of contracts with small and medium-sized enterprises rose steadily, from 41% in 2016 to 82% in 2022 and 72% in 2023 (tab. 1).
Table 1
Key indicators of public procurement of buses, 2016-2023 (compiled by the author based on data from the EIS)
Year | Contracts | Buses purchased | SMEs, % | Avg. bids | Non-competitive, % | Savings, buses % | Savings, all % |
2016 | 1,421 | 5,634 | 41.0 | 1.7 | 73.9 | 2.42 | 8.2 |
2017 | 1,717 | 5,881 | 57.5 | 1.9 | 72.8 | 0.78 | 7.6 |
2018 | 2,147 | 7,428 | 52.7 | 1.7 | 77.1 | 1.36 | 5.9 |
2019 | 1,991 | 8,899 | 62.0 | 1.8 | 74.1 | 0.76 | 6.2 |
2020 | 1,667 | 7,047 | 62.1 | 1.7 | 75.7 | 1.28 | 6.3 |
2021 | 1,159 | 8,064 | 70.6 | 1.8 | 71.7 | 0.74 | 5.2 |
2022 | 903 | 7,138 | 81.7 | 2.2 | 57.1 | 3.97 | 4.7 |
2023 | 1,109 | 9,158 | 71.7 | 1.6 | 72.5 | 1.24 | 5.7 |
Supplier competition remained low throughout: the average number of bids never exceeded 2.2, and non-competitive procedures – those with zero or one bid – exceeded 70% in most years, falling only to 57% in 2022 (tab. 1). Cost savings for buses were consistently far below the overall level, averaging 1-2% versus 5-8% economy-wide. Both indicators support H3, suggesting that the prohibition mechanism, by excluding foreign suppliers, limits competitive pressure among the small pool of eligible domestic manufacturers.
Total contract value reached 257.1 billion roubles, with the sharpest increases in 2019 and 2023. Average price rose steadily and peaked in 2022 at 6.2 million roubles per bus, reflecting inflation and a temporary supply shortage; imports cost roughly twice as much as Russian-made buses. Despite this, Russian-made buses accounted for the largest share every year, never falling below 95.5% (tab. 2). Imports were mostly intercity and touring models from China, South Korea, Japan and Sweden, while the most common Russian brands were PAZ, LiAZ, KAvZ, NefAZ, KamAZ, Volgabus and UAZ, alongside the Belarusian MAZ and NEMAN. This supports H1 and only partially supports H2: the prohibition mechanism sustained a high domestic share but did not increase it further, and the import share even rose slightly in 2022-2023.
Table 2
Distribution of purchased buses by country of origin and share of contracts with national regime violations, 2016-2023 (compiled by the author based on data from the EIS)
Year | Russia, units | Belarus, units | Other, units | Russian-made, % | Violations, % |
2016 | 5,574 | 59 | 1 | 98.9 | 0.07 |
2017 | 5,791 | 89 | 1 | 98.5 | 0.06 |
2018 | 7,398 | 30 | 0 | 99.6 | 0.00 |
2019 | 8,683 | 208 | 8 | 97.6 | 1.00 |
2020 | 6,972 | 68 | 7 | 98.9 | 13.26 |
2021 | 7,953 | 98 | 13 | 98.6 | 11.91 |
2022 | 6,851 | 232 | 55 | 96.0 | 11.63 |
2023 | 8,745 | 276 | 137 | 95.5 | 10.91 |
Contracts with identified national regime violations rose sharply after 2020, from below 1% in 2016-2019 to over 13% in 2020, staying above 10% through 2023 (tab. 2), coinciding with tightened requirements that year requiring confirmation of domestic origin through the industrial products register. The gradual decline since is consistent with customers adapting as the registry expanded – from 9 bus models and 7 manufacturers in 2018 to 1,398 models and 24 manufacturers in 2024 – though as of May 2024 only 38.7% of registered models met the localisation-point threshold, still pushing some customers toward import permits, particularly for touring and intercity buses.
Conclusion
This study assessed the effectiveness of the national regime in Russian bus procurement between 2016 and 2023 using secondary data analysis of 12,114 government contracts. The national regime sustained a high and stable share of Russian-made buses, above 95.5% throughout the period, supporting H1. However, it did not increase this share over time and was accompanied by persistently low supplier competition and cost savings far below the economy-wide level, fully supporting H3 and only partially supporting H2. The 2020 tightening of requirements coincided with a marked rise in violations, which has gradually declined as the registry of eligible domestic models expanded.
These results suggest that while the national regime effectively reduces import dependence in bus manufacturing, it does so at the cost of weaker competition and lower budgetary savings. Policymakers might consider expanding the pool of eligible domestic suppliers, particularly for the intercity and touring segments that remain import-reliant, and simplifying registry documentation to reduce inadvertent violations. Future research should extend this analysis to electric buses and trolleybuses, whose markets are still developing, and examine regional variation in the national regime’s application.
